Are stablecoins stable? Come on, it’s in the name!

Of course, the crypto industry has certainly seen categories misnamed. Anyone remember NuBits? Surely you lost money in Terra? Just last year, DeFi stables, including Synthetix and Ethena, lost their peg. And even robust stablecoins like Circle’s USDC and Tether have seen temporary depegging over the years.

It appears basic questions about stablecoins might actually uncover important lines of inquiry, especially as they relate to the structural risks of a nascent technology. As industries look to adopt stablecoins — sometimes even bypassing the much more battle-tested traditional financial system — it’s probably worth revisiting the answers to these basic questions.

During CoinDesk University’s School of Stablecoins, happening at Consensus 2026, May 5-7 in Miami, we’ll dig under the surface of these questions to give you a strong understanding of why stablecoins are the future and how to implement them into your business to reap benefits.

What is a stablecoin, and how is it different from Bitcoin?

Sam Broner, Founder of the Better Money Company, told CoinDesk he still gets these questions regularly. Bottom line, then: we’re still so early in this technology’s lifecycle. Whereas a stablecoin is a cryptocurrency that keeps a consistent price by being pegged to an asset, like the U.S. dollar, bitcoin’s price moves up and down depending on supply and demand.

Why can’t I just use fiat?

This is a deceptively important question. The idea behind stablecoins, and cryptocurrency broadly, is that it was built for this internet age we now live in. Money should be like the internet — global, real-time, programmable and composable. This innovates on the often clunky architecture of the traditional financial system, where decades of band-aids on an archaic core infrastructure have led to high fees, slow settlement, and inflexible services. So you can use fiat, but during our sessions, we think you’ll be persuaded that stablecoins are the future.

What keeps a stablecoin’s price at $1?

Just like fiat (and crypto), there are different types of stablecoins.

Some keep their peg by having the same amount of collateral in dollars (or euros or whatever fiat they choose) in their coffers. This mechanism design is called fiat collateralized, and it’s how stablecoins like USDC work — they’re backed 100% by cash or cash equivalent assets and are actually redeemable 1:1 with those.

Other stablecoins have what is known as overcollateralization, like DAI. MakerDAO’s stablecoin DAI is backed by overcollateralized loans: it keeps its dollar peg by locking other assets in contracts as collateral for DAI creation.

The last, and slightly controversial, type of stablecoins rely on algorithmic stabilization — that is, computer algorithms are built to manage the supply and demand so that a coin stays pegged to $1. While this is certainly an interesting tech that will continue to be innovated upon, it’s also led to huge failures, subsequently wiping out millions of dollars from the ecosystem.

Still confused? Join any of our CoinDesk University’s School of Stablecoins sessions to talk to the people actually building the stablecoin technology for consumers and businesses.

Who actually holds the money?

With fully backed stablecoins, the issuer holds the money. However, that doesn’t mean that a stablecoin issuer has a bank account and deposits $1 at a time when a new stablecoin is minted.

Instead, fiat-backed stablecoin reserves are usually held by custodians like BlackRock or BNY Mellon. And since each stablecoin issuer decides what their collateral looks like — whether it’s cash or other highly liquid assets — the type of custodian they use will vary based on what actually makes up the reserve.

For overcollateralized stables or coins with algorithmic backing, the issuers usually hold their version of reserves in smart contracts or blockchain-based wallets.

How do I get a stablecoin?

“Even established banks, fintechs, and payment companies that move millions of dollars in transactions every day ask this,” says Better Money Company’s Broner. “And it’s a fair question, because the on-ramps aren’t always obvious.”

So don’t feel embarrassed if you have to ask again. In the cryptocurrency industry, there are exchanges, wallet providers, custodians, payment platforms, plus decentralized and centralized versions of all those. The answer depends on what you’re trying to do with the cryptocurrency after acquiring it.

During CoinDesk University’s School of Stablecoins, you’ll hear from experts in the field about the digital storefronts you can patronize to get your hands on stables and what you can do with them afterward.

What happens if everyone redeems their stablecoins at once?

The U.S. dollar was on the gold standard until 1971 — that meant that you could walk into your bank and demand an equal amount of gold in exchange for dollars at any time. If you did that now, you’d be laughed out of the bank. But fiat-based stablecoins actually still work this way.

If you own a USD-backed stable that’s 100% collateralized, you can redeem it for dollars at any time. If every single person that owned that USD-backed stable went to the issuer to get their dollars at the exact same time (a probabilistic nightmare), hypothetically, everyone would get their money back — it just might not be instantaneous.

As the stablecoin market has grown, issuers have moved away from full cash reserves and instead are filling their reserves with Treasury notes and bonds, all of which should be highly liquid. But as the Silicon Valley Bank collapse showed, when people “run on a bank” that holds stablecoins, the dollar peg can get a little shaky.

What if the government bans stablecoins?

This isn’t as far-fetched as it might sound. In the U.S., the long-awaited CLARITY Act has been held up by unresolved issues, such as banning stablecoin yield (a rightfully tetchy issue). Businesses using stablecoins have been wary of keeping on the right side of regulation, even while getting mixed signals from Washington.

Whether CLARITY ends up passing or not, there’s still a lot to be aware of when using stablecoins in the U.S.. It’s why we invited the Blockchain Association and some of its partners to break down exactly what your business needs to know about policy and compliance.

Are stablecoins safe?

You’ve read the headlines of people losing millions of dollars of cryptocurrency, whether by losing their private keys, having invested in a scam or a project that gets hacked. As we mentioned above, depending on what type of stablecoin you’re investing in, there may be more or less risks associated.

According to Broner, though, that’s rapidly changing as legislation, such as the GENIUS Act, is passed, mandating that stablecoin issuers hold safe collateral as reserves and introducing federal oversight and transparency requirements.

“For an industry trying to earn mainstream confidence, that’s exactly the foundation you need,” Broner says.

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Join us live at Consensus 2026 for our School of Stablecoins workshop series to learn more about how you can implement this new payment method for faster, cheaper, more programmable transactions in this new era of business.

Major Wall Street operator Depository Trust & Clearing Corporation (DTCC) said Monday it will begin limited production trades of tokenized securities in July, with a broader launch of its platform set for October.

The service, built within DTCC’s Depository Trust Company, will allow firms to issue digital versions of assets already held in custody, while keeping the same ownership rights and protections, according to the press release.

The system is being shaped with input from more than 50 firms, including BlackRock, Goldman Sachs, JPMorgan and crypto-native companies like Anchorage and Circle, the firm said.

The effort marks one of the most concrete timelines yet from a core piece of market infrastructure moving into blockchain-based settlement. DTCC sits at the center of U.S. markets, processing trillions of trades daily and serving as custodian of more than $114 trillion in securities.

Tokenization — the process of representing assets such as stocks or bonds on a blockchain — has drawn growing interest among traditional financial institutions. Advocates say it can reduce settlement times, cut costs and open markets to new participants.

“We believe tokenization will significantly change how markets work and operate, bringing new levels of liquidity, transparency and efficiency to investors,” said Frank La Salla, DTCC President and CEO.

Wall Street’s tokenization push

DTCC’s move comes as other Wall Street operators are pushing towards tokenization.

Nasdaq is working on a framework for companies to issue blockchain-based shares and is partnering with the parent company of crypto exchange operator Kraken to distribute them globally, with a potential launch as early as 2027. Intercontinental Exchange, which owns the New York Stock Exchange, has also backed plans for tokenized stocks through a deal with crypto platform OKX, aiming to tap into its large user base.

These efforts reflect a wider race to build what some call an “everything exchange,” where stocks, bonds and digital assets trade on shared infrastructure.

DTCC has gradually been building toward this moment. The firm has tested distributed ledger systems for years and has joined projects like the institution-focused Canton Network (CC). In December, it obtained a no-action letter from the SEC, allowing it to offer tokenization services for a defined set of assets, including Russell 1000 stocks, ETFs and U.S. Treasuries.

Read more: Here is why Nasdaq and owner of NYSE are putting the $126 trillion equity market on blockchain

It has cost Michael Saylor-founded Strategy (formerly MicroStrategy) 10 figures to flip its 11-figure loss from February back into positive territory this month and eke out a 1% annual rate of return since his company started buying bitcoin (BTC).

On May 1, BTC rallied above the company’s then-$75,537 average cost basis. Last night, it extended that rally above $80,000 per coin.

Strategy’s holdings had an $11.5 billion unrealized loss as of February 6, 2026; with BTC trading at $80,000 last night, Strategy now has an unrealized gain of $3.7 billion.

To service this investment, however, Strategy pays far more than a few basis points of trading commissions. To the contrary, the company has paid over $1 billion to operate its incredibly complex operations that funded these purchases.

Over $1 billion to buy Strategy’s bitcoin

All-in, it has cost Strategy over $1 billion, beyond the cost of the BTC itself, to purchase its BTC treasury.

In the five years since 2020, the first year Strategy bought BTC, the company has reported $259 million in net interest expenses to service its indebtedness, plus $381 million of dividends to its preferred shareholders. Issuance costs associated with compensating the brokerages and investment bankers for raising that capital added another $163 million.

Add $319 million of company-wide equity-based compensation over those five years, most of which went to executives and board members who pivoted the company from software sales to BTC buys, and the tally exceeds $1.1 billion.

Read more: Michael Saylor’s Strategy lost $1.2 billion buying bitcoin in Q1

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Even ignoring the executive compensation involved in directing and managing BTC buys would still yield a figure above $1 billion. Indeed, during the first four months of 2026, the company has also paid over $8 million in additional interest payments to bondholders plus over $300 million in dividends to preferred shareholders.

Paying approximately $1 billion to lose $11.5 billion before an asset luckily rallied to recoup those losses is certainly an obtrusive investing strategy.

Just believe bitcoin will rally more

Of course, Saylor justifies this extravagantly expensive bet on BTC by repeatedly claiming that BTC is supposed to rally at least 30% a year for the next decade. If it does, he argues, all of these expenses will have been worth it.

In fact, he erroneously believes BTC has already exceeded his target over the trailing five years.

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Specifically, on April 30, 2026, Peter McCormack failed to correct Michael Saylor’s claim that the average rate of return (ARR) of BTC over the five prior years was 39% annually. 

“What’s the bitcoin performance for the past 5 years? 39%,” Saylor inaccurately claimed. “Ever since we got in this business, bitcoin has appreciated 39% a year ARR.”

In fact, for the five years prior to April 30, 2026, the ARR of BTC was 6%.

Even extending the timeframe to nearly six years prior — August 10, 2020 to be precise, which is the date of Strategy’s first BTC purchase — the ARR figure rises to a mere 36% and is still shy of Saylor’s loudly proclaimed number.

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Strategy paid $1 billion to generate 1% annually

Moreover, the return of BTC since August 10, 2020, is not the investment return of Strategy’s BTC, which is nowhere close to 36%. Instead, Strategy’s holdings have been negative for many months of Saylor’s trade due to him buying in at high prices.

Hang on a second, if $BTC‘s average return is 39% per year, how are you only up 3% in the last 6 years? 🤔

Your cost average is 76K, you pay 10-11.5% per year on borrowed money. Only 3% return means you’re net negative

Where is the strategy in Strategy Michael Saylor? 🤪$MSTR https://t.co/KxaRddj2sr pic.twitter.com/YFsF9yOUjX

— Financelot (@FinanceLancelot) May 1, 2026

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In total, the company has only earned 5.9% with BTC trading at $80,000 per coin. Worse, it has taken the company 5.7 years to achieve that 5.9%, meaning its actual ARR is just 1%.

In summary, Strategy has paid closing costs, commissions, compliance staff, executive compensation, interest, and dividends exceeding $1 billion to service more than five years of financial engineering to buy BTC. For these 10 figures worth of expenditures, Strategy has achieved annual investing returns of 1% with BTC trading at $80,000.

Got a tip? Send us an email securely via Protos Leaks. For more informed news, follow us on X, Bluesky, and Google News, or subscribe to our YouTube channel.

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Dubai, UAE, May 5, 2026 – ZIGChain, the blockchain built to bring regulated investment products onchain for everyday users, today reflected on its second annual ZIGChain Summit, a defining gathering for the future of onchain finance, held on 28 April at the The Meydan Hotel, Dubai.

Organised in partnership with Disrupt and streamed live on Cointelegraph, the summit brought together institutions, builders, regulators, and capital allocators from across the GCC and global markets under one shared conviction: that the shift from exploration to execution in onchain finance has already begun.

Nothing compounds alone

The summit’s central theme, Nothing Compounds Alone, set the tone for a programme built around coordinated progress. Each session was designed not as another discussion but as a mechanism for alignment: bringing capital, technology, and regulation into the same room so that decisions happen earlier and execution compounds faster.

The eight-session programme moved through the full arc of the ecosystem’s evolution from foundational infrastructure and the UAE’s regulatory advantage, to startup formation, fintech integration, tokenization and capital markets, and the next frontier for onchain finance. Throughout, product launches, strategic partnerships, and ecosystem announcements were unveiled, reflecting the momentum behind ZIGChain’s growing institutional pipeline.

An event built for execution

This year’s speaker roster brought together some of the most consequential voices in institutional digital finance. Participants included Dr. Saeeda Jaffar of Circle, Jez Mohideen, CEO and Co-Founder of Laser Digital, Dino Ibric, Deputy CEO of Swissquote MEA, Christiane El Habre, Regional Managing Director of Apex Group, Ramana Kumar from ADI, Faisal Al Hammadi from Further Ventures, Abhi, and Peter Tavener, CEO and Co-Founder of Beehive, among a broader cohort of operators, founders, and regulators.

What distinguished the room was intent. Every participant was either deploying capital into onchain infrastructure, building the protocols that underpin it, or designing the regulatory environment around it. The UAE’s multi-regulator framework — spanning VARA, the DFSA, and FSRA — provided the backdrop for substantive, compliance-first discussion about what institutional adoption at scale actually looks like.

“ZIGChain exists because wealth at scale doesn’t happen in isolation,” said Abdul Rafay Gadit, Co-Founder, ZIGChain. “The partnerships, the infrastructure, the capital, all of it has to move together. Our progress so far proved that they are. What we showcased, across these sessions and across every announcement made on the day, is a compounding ecosystem that grows stronger with each new connection, where every player has a role in driving the future. That’s what the next chapter of onchain finance looks like.”

Ecosystem momentum on full display

The summit served as a natural culmination of a period of significant ecosystem activity for ZIGChain. In the weeks leading into the event, the network announced a strategic partnership with Beehive — the Middle East’s pioneering DFSA-regulated SME funding platform — to explore the tokenization of private credit in the UAE. Valdora Finance, a non-custodial liquid staking protocol, had also deployed on ZIGChain, bringing liquid, composable access to institutional-grade real-world asset yield strategies through its Liquid RWA Vaults. 

These announcements, combined with the summit’s programme of new partnership and product reveals, underscored ZIGChain’s position as the infrastructure layer through which regulated, institutional-grade investment products are being brought onchain at scale across the GCC and beyond.

ZIGChain’s broader institutional pipeline continues to grow, supported by a regulation-ready architecture, cross-chain interoperability, and a growing roster of ecosystem partners spanning private credit origination, asset management, digital custody, and onchain yield infrastructure.

The UAE as the world’s onchain capital 

A recurring theme across the day was the UAE’s unique position at the convergence of capital, regulation, and digital asset infrastructure. The country’s progressive multi-regulator approach — with VARA, the DFSA, and FSRA providing layered, complementary frameworks — has created the conditions for institutional capital to move onchain with confidence. Dubai, in particular, has emerged as the jurisdiction where that convergence is most visible and most active.

ZIGChain Summit 2026 made that convergence tangible by bringing the builders, the allocators, and the regulators together in one room and demonstrating that the infrastructure is not only ready, but already in use.

ZIGChain thanks all speakers, partners, attendees, and the broader ecosystem for their participation in ZIGChain Summit 2026. Recordings of the main stage programme, streamed live via Cointelegraph, are available to the global community.

About ZIGChain

ZIGChain is a Layer 1 blockchain purpose-built for regulated, institutional-grade investment opportunities onchain. It provides the infrastructure for institutions to launch compliant financial products, enabling retail participants to access them alongside institutional capital.

Learn more at zigchain.com.

This publication is provided by the client. The text below is a paid press release that is not part of Cointelegraph.com independent editorial content. The text has undergone editorial review to ensure quality and relevance, it may not reflect the views and opinions of Cointelegraph.com. Readers are encouraged to conduct their own research before taking any actions related to the company. Disclosure.

In this video, we’ll explore the key economic events and market trends, shaping the financial landscape. Get ready for insights into financial markets to help you navigate the week ahead. Let’s dive in!

In this episode of Market Insights, Gary Thomson unpacks the strategic implications of the most critical events driving global markets.

👉 Key topics covered in this episode:

✔️  RBA Interest Rate Decision
The Reserve Bank of Australia will announce its rate decision on 5 May, with markets expecting another hike amid rising inflation. With price pressures still elevated and a third consecutive increase possible, both the decision and the press conference could drive volatility in the Australian dollar. Will the RBA signal more tightening?

✔️  Canada’s Unemployment Rate
Canada will release its labour market data on 8 May, with the unemployment rate previously holding steady at 6.7%. Despite stable figures, the Canadian dollar showed volatility, and markets will closely watch for any signs of weakness that could pressure the currency. Will unemployment remain stable, or rise and weigh on the Canadian dollar?

✔️  US NFP and Unemployment Rate
The US labour market report will also be released on 8 May and closely watched after strong job growth and a lower unemployment rate supported the dollar last time. With USD pairs reacting sharply to the previous release, another surprise in the data could trigger significant market moves. Will the data confirm continued strength, or shift expectations for the US dollar?

✔️  Earnings Reports
This week, attention turns to earnings from Advanced Micro Devices, offering insight into AI-driven demand. Its results could shape sentiment across tech markets and growth assets. Will strong earnings reinforce optimism in tech, or highlight emerging weaknesses in demand?

With several high-impact releases scheduled, short-term direction may depend less on the data itself and more on how it compares to expectations. Risk management and flexibility remain important for navigating the markets.

Gain insights to strengthen your trading knowledge.
💬 Don’t forget to like, comment, and subscribe for more market insights every week.

Watch it now and stay updated with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Key Takeaways

• Amazon unveiled Supply Chain Services, extending its extensive logistics infrastructure to external businesses
• FedEx shares plummeted approximately 5–6% while UPS experienced declines exceeding 4% during Monday’s opening session
• Major corporations including Procter & Gamble, 3M, Lands’ End, and American Eagle Outfitters have already signed on
• The platform integrates freight transportation, warehousing, delivery services, and artificial intelligence-driven demand planning
• Additional logistics sector stocks declined, including GXO Logistics, XPO, and Hub Group

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On Monday, Amazon revealed plans to extend its expansive logistics infrastructure beyond its own ecosystem. Branded as Amazon Supply Chain Services, this initiative enables external companies from diverse sectors to leverage Amazon’s freight handling, warehousing, and distribution capabilities.

The market responded swiftly to this development. FedEx experienced declines ranging from 4.4% to 5.7%, while United Parcel Service witnessed drops of approximately 4.1% to 4.2% during pre-market and early trading hours. Meanwhile, Amazon’s stock climbed between 1.2% and 1.75% following the announcement.

United Parcel Service, Inc., UPS

The ripple effect extended throughout the logistics industry. GXO Logistics declined 5.2%, XPO decreased 2.5%, Hub Group fell 1.7%, and RXO dropped 1.7%.

Amazon’s logistics footprint is substantial. The company operates 80,000 trailers, 24,000 intermodal containers, and maintains a fleet of 100 aircraft. Until now, this extensive infrastructure primarily served Amazon’s e-commerce and marketplace ecosystem.

The platform offers an integrated suite of capabilities. Companies can tap into ocean, air, ground, and rail transportation options. Additionally, they gain access to Amazon’s warehouse and fulfillment facilities for inventory control, complemented by parcel delivery services promising two-to-five-day transit times.

Artificial intelligence features are embedded throughout the platform. These advanced tools manage demand prediction and strategic inventory distribution, enabling businesses to enhance delivery performance and consistency.

Clients manage all operations through a unified digital dashboard. This centralized interface allows companies to select and customize their required services.

Notable enterprises have already embraced the platform. Procter & Gamble utilizes Amazon’s transportation network for moving both raw materials and completed products. 3M employs the service to transport goods from production facilities to warehouses.

Diverse Client Base Emerges Quickly

Lands’ End and American Eagle Outfitters have also joined as initial adopters. Amazon indicated the service welcomes companies regardless of size, spanning healthcare, automotive, manufacturing, and retail sectors.

This strategic shift positions Amazon as a direct challenger to established logistics giants. FedEx and UPS have historically controlled the parcel and freight transportation landscape throughout the United States.

Amazon has systematically constructed its delivery infrastructure over recent years. This network has expanded sufficiently to enable the company to manage a substantial portion of its shipments internally, reducing dependence on third-party carriers.

Freight Sector Feels the Pressure

Monday’s trading activity demonstrates investor concern regarding this strategic development. Numerous logistics companies experienced significant valuation decreases within hours of the announcement.

Amazon verified that the service is operational with confirmed enterprise clients already utilizing the platform. However, the company has not publicly revealed pricing structures in its initial announcement.

Among the broader group of impacted companies, GXO Logistics recorded the most substantial decline, dropping 5.2% during the trading session.

Key Points

• The Trump family’s crypto platform, World Liberty Financial, filed a defamation lawsuit against Justin Sun this week
• The company alleges Sun engaged in short selling of WLFI tokens and made unauthorized purchases through proxy entities
• Sun previously filed his own lawsuit in April against World Liberty, alleging improper freezing of his token holdings
• According to World Liberty, Sun initiated a “public smear campaign” on social media after the company declined to restore access to his frozen assets
• Sun’s total investment in World Liberty reached approximately $75 million in 2024, which included purchases of the TRUMP meme coin

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The cryptocurrency platform World Liberty Financial, co-established by President Donald Trump alongside his family members, has initiated federal legal proceedings against crypto billionaire Justin Sun, alleging defamation and improper token activity.

The complaint was submitted to federal court on Monday. This legal move comes after Sun filed his own lawsuit against World Liberty this past April, claiming the platform illegally restricted access to his tokens and stripped him of governance voting privileges.

Sun made his initial $30 million commitment to World Liberty Financial in November 2024. This capital injection provided crucial support to the platform’s operations and helped fund day-to-day expenses. Subsequently, he contributed an additional $45 million or more, pushing his aggregate investment to roughly $75 million.

World Liberty Financial now contends that Sun, despite being a major stakeholder, participated in short selling activities targeting its WLFI tokens with the intention of depressing market prices. The platform further accuses him of conducting straw purchases—essentially buying WLFI tokens through his controlled entities on behalf of undisclosed third-party investors.

Following World Liberty‘s decision to lock Sun’s token holdings due to these purported infractions, Sun allegedly requested immediate restoration of access. When the platform rejected his demands, World Liberty claims Sun escalated the matter through public channels.

Social Media Backlash

Sun posted on X in April, sarcastically renaming World Liberty as “World Tyranny.” He labeled company leadership as “bad actors” and characterized the token freeze as “illegitimate and were never authorized by any fair, transparent, or good-faith community governance process.”

World Liberty Financial maintains these public statements were both inaccurate and harmful. The lawsuit asserts that Sun’s comments damaged the platform’s standing in the industry and resulted in lost business partnerships and investment opportunities.

World Liberty contends its authority to freeze tokens was clearly disclosed in public documentation and formed part of its original contractual arrangements with Sun.

Ongoing Litigation

Sun’s April legal filing remains active in the courts. His lawsuit seeks a jury trial, financial compensation, and the immediate unlocking of his WLFI token holdings.

World Liberty Financial’s newly filed defamation case similarly requests a jury trial along with damages in an amount yet to be specified. Legal experts anticipate both proceedings could extend for months or potentially years before reaching final resolution.

As of Monday, Sun’s legal representation had not issued a statement or response to media inquiries regarding the defamation allegations.

Sun established the Tron blockchain network in 2017 and remains its primary architect. According to Forbes’ latest wealth calculations, his personal fortune stands at $8.5 billion, placing him at position 412 on the publication’s worldwide billionaires ranking.

World Liberty Financial commenced operations in 2024. The platform markets itself as a decentralized finance ecosystem championed by Donald Trump. The venture counts Eric Trump, Donald Trump Jr., and Barron Trump among its founding team members.

The Securities and Exchange Commission had previously conducted an investigation into Sun regarding potential securities fraud violations. That matter was ultimately resolved through settlement, and additional regulatory probes into cryptocurrency platforms associated with Sun have since been discontinued.

Binance is launching a user-controlled withdrawal lock aimed at a threat the crypto industry has spent the past year reckoning with: physical coercion of holders, otherwise known as the so-called wrench attacks.

The feature, “Withdraw Protection,” lets users freeze their own account against onchain withdrawals for one to seven days, the exchange said Monday. A stricter “lockdown” mode disables early unlocking entirely. Binance’s press release says the lock cannot be overridden by the exchange.

In an interview with CoinDesk, the exchange’s Chief Security Officer Jimmy Su said the company built the feature in response to patterns it observed in the wild, including “withdrawals that are more risky or even coerced in some cases.”

He pointed to users traveling to regions where being identifiable as a crypto holder carries physical risk.

“We are seeing a pattern where some of the users might go to more risky geographical locations,” Su said. “They want to have this user-control layer where they can put in a restriction on withdrawals. In case anything happens, that would give them more time to recover.”

Asked whether the feature was a defense against wrench attacks specifically, Su said that was one scenario, alongside cases in certain regions where bad actors actively work to identify crypto users for in-person targeting.

A policy lock

Binance’s press release framed the un-overridable lock as a hard guarantee. Su clarified the mechanism is an internal policy.

“It’s an internal policy for this particular feature. Our customer service agents are not able to override it,” Su told CoinDesk. “The goal is to address the irreversible transfer nature of crypto.. Unlike a fiat scenario where funds are withdrawn to a checking or bank account and there are ways to reverse the transaction, you can’t do that with onchain crypto.”

The distinction matters. A cryptographic lock would be effectively immutable for the user’s chosen period. A policy lock depends on Binance’s continued enforcement, and on the absence of legal compulsion to lift it. Su said the feature does not block law enforcement orders.

“This does not prevent law enforcement from taking action on accounts,” he said.

Why a delay is now worth offering

Withdrawal-delay features are not new. Coinbase has offered Vaults, with a 48-hour delay and email confirmation, for years. Kraken offers a similar Global Settings Lock.

The threat landscape has changed. According to data from CertiK and crypto researcher Jameson Lopp, verified physical coercion incidents against crypto holders rose 75% in 2025, reaching 72 confirmed cases. Assault-related incidents jumped 250%.

Coerced withdrawals defeat conventional account security. Every credential check is completed by the legitimate user.

A time lock changes that calculus: a user who activates Withdraw Protection before traveling to a high-risk region cannot be forced to move funds at the destination, even under physical threat. Contacting support, in this case, wouldn’t help either.

Trading bots and the next layer

Asked what user behavior worries him most, Su pointed to trading bots advertised on forums and ad networks that ask users to grant API keys with broad permissions.

“If the trading bot is a scam, it can be used to cause trading losses and unauthorized withdrawals,” Su said. Users should treat API keys with the same protection as their passwords or two-factor authentication, he added: “Once a key is used by a trading bot, it’s as if they are operating on behalf of that user.”

Binance is investing in context-aware authentication that varies friction based on detected risk, Su said. For routine actions like login or trading, the goal is to reduce visible challenges. For high-risk actions like withdrawals, more friction is the point.

He framed Withdraw Protection as one layer in a defense-in-depth approach, not a replacement for basic hygiene. The advice for the wrench-attack threat model, he said, was to manage one’s online footprint.

“Crypto users need to protect their online presence,” Su said. “Trying to protect the confidential information in terms of how much they have in crypto. Make yourself a harder target.”